FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23153 / December 9, 2014
Securities and Exchange Commission v. George H. Holley, et al., Civil Action No. 3:11-cv-00205-MLC-DEA (D.N.J.) filed January 13, 2011; Securities and Exchange Commissionv. Robert J. Hahn-Baiyor, Case No. 3:14-cv-07631-JAP-TJB (D.N.J.) filed December 8, 2014
The Securities and Exchange Commission announced today that on December 8, 2014, the Honorable Douglas E. Arpert of the United States District Court for the District of New Jersey entered a final judgment against defendant George H. Holley, the former Chairman of the Board of Directors of Home Diagnostics, Inc. The final judgment permanently enjoins Holley from violating certain antifraud provisions of the federal securities laws, permanently bars him from acting as an officer or director of a public company, and orders him to pay disgorgement of $66,100 plus prejudgment interest thereon, and a civil penalty in the amount of $312,440.
In its Complaint, the SEC alleged that, in 2010, Holley, who co-founded Home Diagnostics, tipped six of his friends, relatives, and employees with confidential information about the impending acquisition of Home Diagnostics by Nipro Corporation. Each of the tippees subsequently purchased HDI stock on the basis of Holley's tips and, following the public announcement of the acquisition, sold their HDI shares for a combined profit of over $260,000.
On August 8, 2012, Holley pleaded guilty to federal criminal charges of securities fraud in a parallel criminal action before the District Court for the District of New Jersey in United States v. George H. Holley, Crim. No. 11-0066-JAP (D.N.J.). On December 18, 2012, Holley was sentenced to three years of probation and fined $260,000.
The final judgment permanently enjoins Holley from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder, the general antifraud and tender offer fraud provisions of the federal securities laws. In addition, the judgment against Holley permanently bars him from acting as an officer or director of a public company, and orders him to pay disgorgement of $66,100, plus prejudgment interest thereon, and a civil penalty in the amount of $312,440. Holley consented to the entry of the final judgment.
The Commission also announced today charges against Holley's first-cousin, Robert J. Hahn-Baiyor, for trading on the basis of inside information about the impending acquisition of Home Diagnostics that was tipped to him by Holley. In a Complaint filed in the United States District Court for the District of New Jersey, the SEC alleges that Hahn-Baiyor violated Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder,. Without admitting or denying the allegations in the SEC's Complaint against him, Hahn-Baiyor has consented to the entry of a final judgment that permanently enjoins him from future violations of the provisions of the federal securities laws that he is alleged to have violated and requires him to pay a civil penalty of $66,100. Hahn-Baiyor's settlement is subject to approval by the Court.
This concludes the litigation in SEC v. Holley. Previously, the court in SEC v. Holley had entered final judgments against co-defendants Steven V. Dudas and Phairot Iamnaita. In addition, on May 6, 2014, the Commission filed civil injunctive actions against three other tippees of Holley - John Campani, John Mullin, and Alan Posner - each of whom subsequently consented to the entry of final judgments ordering injunctive and monetary relief.
The SEC thanks the U.S. Attorney's Office for the District of New Jersey, the Federal Bureau of Investigation, and FINRA, for their cooperation and assistance in this matter.
